Institute using Zakah funds
Assalamu alaykum wa rahmatullahi w abarakatuhu,
We are running an Islamic organization here in the Klerksdorp area. Since we provide free education for the poor, the vast majority of our students do not pay the prescribed school fees. This has called a huge short fall of funds and we are now in a debt.
However, we do receive numerous Zakaah funds from the larger Muslim community. What is the best way for us to use the Zakah monies on the poor, but also cause it to benefit the institute in some way?
Wa’alaykum as Salam wa rahmatullahi wa barakatuhu,
Having analysed your situation and understanding the crisis you are facing, we propose the following methods which you may employ in distributing the Zakah funds at your disposal in alleviating the difficulties you are experiencing in this regard.
 Proposal No. 1
Those children who do not possess sufficient means and neither are their parents in a situation to adequately provide for their sound educational needs being one of their fundamental obligations unto their children and who have duly qualified as being entitled to receive Zakah funds as per your screening process and who have reached the age of discretion whereby they are able to firmly comprehend and understand the concept of Zakah and its impetus in as far as the acceptance thereof is concerned and also understanding the need thereof, all such children should hence-with be summoned before your administration and setting up a fee payment structural unit on the one side these Zakah funds should directly be given into their hands whereby they take ownership thereof and thereafter (having emphasized the need of paying for their education to them) they should then be passing through another desk to pay for their monthly/annual fees with these funds rendered at their disposal for this purpose. In this way the Zakah would be considered as discharged and valid and the funds thereby collected permitted to utilize for any of your school needs thereafter.
 Proposal No. 2
Due to the deficit faced by the school caused by the large number of non-paying and partial-paying students another method prescribed is that an individual solicits a loan from another of an amount being far more than his scope to sustain which renders him indebted and hence liable of Zakah. He then grants this sum of money as a donation and goodwill gesture to the school who in turn will assist him to alleviate his burden of repaying the loan he had taken by availing unto him the Zakah funds they have collected.
 Proposal No. 3
One other method that is also viable is that when any student takes admission at the school and it has been established that he is liable to accept Zakah or due to being a minor and one who has not as yet reached the age of discretion, the condition of his parents is such that they are not able to adequately cover his educational expenses, which in turn renders them liable of Zakah as well, then you may advise them to allow the Principal or the Treasurer to be granted power of attorney to act on their behalf as a Wakeel to accept Zakah in their name which they duly acknowledge and authorize you to do. Having done so it would then be permissible for the school to utilize the said funds for the expenses of the school and the Zakah would also be regarded as discharged.
Furthermore, with regard to your individual queries, the answers follow hereunder:
a)All those children who qualify to accept Zakaat as per your screening process whether they are totally non paying or partial paying students, are all deserving and may take advantage of any of the schemes proposed above.
b)As far as those children are concerned whose parents are non-Muslims, if they have reached the age of discretion being round about ten years then they would require the guardianship of a Mature Muslim who also being entitled to Zakah would then be permitted to act on behalf of the child as a Wakeel to collect Zakah on their behalf.
c) Parents who feel shy and regard the acceptance of Zakah as a shame should be made to understand that under the circumstances this is fully in order and a channel prescribed by shariah to maintain the equilibrium in society whereby the interests of all the individuals are kept at heart for which they should not despise themselves but rather avail of the finances made available at their disposal due to necessity for which there is no need to shirk therein.
Insha Allah, by employing one of the above methods, you will be able to assist the poor and also benefit your institute.